Direct Purchase Program

DEFINITION of 'Direct Purchase Program'

A direct purchase program is a method by which individuals can buy stock in a company directly from that company. The advantage of a direct purchase program is that there is no need to pay any broker fees or commissions. The majority of big corporations offer direct purchase programs as a way of encouraging investment.

BREAKING DOWN 'Direct Purchase Program'

Direct purchase programs differ from company to company. These programs are required to comply with complex federal and state securities laws, which can impose various restrictions and eligibility requirements for investors wishing to acquire stock in this manner. This rise of low-cost brokerage services has caused this method of commission-free purchasing to decline in popularity.

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RELATED FAQS
  1. How can I purchase stocks directly from a company?

    There are a few circumstances in which a person can buy stock directly from a company. The following is meant to cover some ... Read Answer >>
  2. What is the quickest, easiest and cheapest way to buy a bond?

    Bonds usually can be purchased from a bond broker through full service or discount brokerage channels, similar to the way ... Read Answer >>
  3. Is a Canadian resident allowed to participate in a direct stock purchase plan from ...

    There is no law that prevents Canadians from participating in direct stock purchase plans offered by U.S. companies. There ... Read Answer >>
  4. How do frequent flier mile programs affect the profitability of an airline?

    Learn more about how airlines use frequent-flier miles and how this industry practice is changing due to less-satisfying ... Read Answer >>
  5. Is there a maximum amount of stock an individual investor or corporation can purchase?

    There are two answers to this question. The short answer is that there is no limit to the number of shares one entity may ... Read Answer >>
  6. How much more will it cost me to buy an odd lot of shares?

    A round lot is a predetermined number of shares of stock - usually 100 shares, while an odd lot refers to any number of shares ... Read Answer >>
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